BALANCE AT WORK BLOG

More profit from your practice

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How profitable are your people management practices?

You already understand the importance of excellent practice management in helping you deliver on your client value proposition. When you look at businesses that really shine, regardless of their size, age, market or niche, their success can always be traced back to having exceptional employees. Attracting and retaining exceptional employees – the best talent – is only sustainable with exceptional employment practices.

Data linking people management practices to financial returns was published in the Future Ready III whitepaper by Business Health in April 2007. In their data analysis of over 1000 advisory practices in Australia, they found that those with effective people management practices (majority of staff have job descriptions, individual objectives, regular reviews and awareness of the high level business goals) had profits 159% higher than those with ineffective people management practices.

The simple practice of having job descriptions for your staff can have a dramatic effect on profits. Practices with job descriptions for more than half of their employees were found to have profit levels at 125% above those with fewer staff with job descriptions. This is equivalent to an extra $101,096 profit per principal.

A detailed organisational structure with clear roles, responsibilities and reporting lines will form the basis of job descriptions. The time invested will be repaid many times over when everyone knows what they’re doing and why. If you already have job descriptions in place, ensure you keep them up to date and relevant by consulting the current incumbents.

What should you include in a job description? At a minimum, a job description includes:

  • An accurate job title
  • The purpose of the role
  • The location of the role
  • Key relationships, both external and internal, including reporting lines
  • Essential qualifications, skills and experience required for the role
  • Key responsibility areas

When you build on the job description with personal objectives (KPIs) and a structured performance management process, you are developing systems that have been shown to have a positive impact on business financial performance, according to the Business Health whitepaper.

The next article in this series will look at the when, where and how of finding and selecting the best talent for your practice. For more information on people management for your practice, contact Susan Rochester on 1300 785 150 or susanr@balanceatwork.com.au

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